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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5156 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 5156

 To amend the Internal Revenue Code of 1986 to enhance the low-income 
              housing tax credit, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 24, 2024

  Mr. Whitehouse (for himself and Mr. Reed) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to enhance the low-income 
              housing tax credit, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Housing Construction 
Act''.

SEC. 2. INCREASE IN STATE HOUSING CREDIT CEILING.

    (a) In General.--Section 42(h)(3)(C)(ii) of the Internal Revenue 
Code of 1986 is amended--
            (1) by striking ``$1.75'' in subclause (I) and inserting 
        ``$9.79'', and
            (2) by striking ``$2,000,000'' in subclause (II) and 
        inserting ``$11,340,000''.
    (b) Inflation Adjustments.--Section 42(h)(3)(H) is amended--
            (1) by striking ``In the case of a calendar year after 
        2002, the $2,000,000 and $1.75 amounts in subparagraph (C)'' in 
        clause (i) and inserting ``In the case of a calendar year after 
        2025, the $16,542,968 and $9.79 amounts in subparagraph (C)'',
            (2) by striking ``calendar year 2001'' in clause (i)(II) 
        and inserting ``calendar year 2024'',
            (3) by striking ``$2,000,000'' in clause (ii)(I) and 
        inserting ``$11,340,000'', and
            (4) by striking ``$1.75'' in clause (ii)(II) and inserting 
        ``$9.79''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after December 31, 2024.

SEC. 3. INCREASED CREDIT AMOUNTS AND CREDIT ALLOCATION SET-ASIDES FOR 
              CERTAIN BUILDINGS.

    (a) Increased Credit Amounts.--
            (1) In general.--Section 42(d)(5) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        subparagraphs:
                    ``(C) Increase in credit for prevailing wage 
                buildings.--
                            ``(i) In general.--In the case of any 
                        building which pays applicable laborers at 
                        rates not less than the prevailing rates for 
                        construction, alteration, or repair of a 
                        similar character in the locality in which such 
                        facility is located as most recently determined 
                        by the Secretary of Labor, in accordance with 
                        subchapter IV of chapter 31 of title 40, United 
                        States Code, and which is designated by the 
                        housing credit agency as requiring the increase 
                        in credit under this subparagraph in order for 
                        such payments to be financially feasible as 
                        part of a qualified low-income housing 
                        project--
                                    ``(I) in the case of a new 
                                building, the eligible basis of such 
                                building shall be increased by 50 
                                percent of such basis determined 
                                without regard to this subparagraph and 
                                subparagraphs (B), (D), (E), (F), and 
                                (G), and
                                    ``(II) in the case of an existing 
                                building, the rehabilitation 
                                expenditures taken into account under 
                                subsection (e) shall be increased by 50 
                                percent of such expenditures determined 
                                without regard to this subparagraph and 
                                subparagraphs (B), (D), (E), (F), and 
                                (G).
                            ``(ii) Applicable laborers.--For purposes 
                        of this clause, the term `applicable laborers' 
                        means, with respect to any building, any 
                        laborers employed by the taxpayer, or any 
                        contractor or subcontractor, in the 
                        construction, alteration, or repair of the 
                        building.
                    ``(D) Increase in credit for buildings powered by 
                renewable energy.--
                            ``(i) In general.--In the case of any 
                        building which utilizes renewable energy (as 
                        defined in section 203(b)(2) of the Energy 
                        Policy Act of 2005), and which is designated by 
                        the housing credit agency as requiring the 
                        increase in credit under this subparagraph in 
                        order for such renewable energy use to be 
                        financially feasible as part of a qualified 
                        low-income housing project--
                                    ``(I) in the case of a new 
                                building, the eligible basis of such 
                                building shall be increased by the 
                                applicable percentage of such basis 
                                determined without regard to this 
                                subparagraph and subparagraphs (B), 
                                (C), (E), (F), and (G), and
                                    ``(II) in the case of an existing 
                                building, the rehabilitation 
                                expenditures taken into account under 
                                subsection (e) shall be increased by 
                                the applicable percentage of such 
                                expenditures determined without regard 
                                to this subparagraph and subparagraphs 
                                (B), (C), (E), (F), and (G).
                            ``(ii) Applicable percentage.--For purposes 
                        of this subparagraph, the applicable percentage 
                        is 50 percent of the percentage of the energy 
                        utilized by such building which is from 
                        renewable energy (as so defined).
                    ``(E) Increase in credit for buildings near public 
                transportation.--
                            ``(i) In general.--In the case of any 
                        building which is located in a public 
                        transportation zone and which is designated by 
                        the housing credit agency as requiring the 
                        increase in credit under this subparagraph in 
                        order for such building to be financially 
                        feasible as part of a qualified low-income 
                        housing project--
                                    ``(I) in the case of a new 
                                building, the eligible basis of such 
                                building shall be increased by 25 
                                percent of such basis determined 
                                without regard to this subparagraph and 
                                subparagraphs (B), (C), (D), (F), and 
                                (G), and
                                    ``(II) in the case of an existing 
                                building, the rehabilitation 
                                expenditures taken into account under 
                                subsection (e) shall be increased by 25 
                                percent of such expenditures determined 
                                without regard to this subparagraph and 
                                subparagraphs (B), (C), (D), (F), and 
                                (G).
                            ``(ii) Public transportation zone.--For 
                        purposes of this subparagraph, a building is 
                        located in a public transportation zone if--
                                    ``(I) the building is within one-
                                half mile of an existing commuter rail, 
                                light rail, or subway station,
                                    ``(II) the building is within one-
                                quarter mile of one or more existing 
                                public bus stops, or
                                    ``(III) the building is located in 
                                a census tract--
                                            ``(aa) designated by the 
                                        Administrator of the 
                                        Environmental Protection Agency 
                                        as having above average 
                                        walkability, or
                                            ``(bb) which is adjacent to 
                                        2 or more such census tracts 
                                        described in item (aa).
                    ``(F) Increase in credit for buildings serving 
                households with people with disabilities.--
                            ``(i) In general.--In the case of any 
                        building which has low-income units that meet 
                        the applicable design standards for occupancy 
                        by persons with mental, physical, sensory, or 
                        developmental disabilities, and which is 
                        designated by the housing credit agency as 
                        requiring the increase in credit under this 
                        subparagraph in order for such building to be 
                        financially feasible as part of a qualified 
                        low-income housing project--
                                    ``(I) in the case of a new 
                                building, the eligible basis of such 
                                building shall be increased by the 
                                applicable percentage of such basis 
                                determined without regard to this 
                                subparagraph and subparagraphs (B), 
                                (C), (D), (D), and (G), and
                                    ``(II) in the case of an existing 
                                building, the rehabilitation 
                                expenditures taken into account under 
                                subsection (e) shall be increased by 
                                the applicable percentage of such 
                                expenditures determined without regard 
                                to this subparagraph and subparagraphs 
                                (B), (C), (D), (E), and (G).
                            ``(ii) Design standards.--For purposes of 
                        clause (i), the term `applicable design 
                        standards' means the principles and standards 
                        of adaptable design as detailed in the Uniform 
                        Federal Accessibility Standards, or any 
                        successor standard designated by the Secretary.
                            ``(iii) Applicable percentage.--For 
                        purposes of this subparagraph, the term 
                        `applicable percentage' means the number of 
                        percentage points (not to exceed 50 percentage 
                        points) by which--
                                    ``(I) the ratio (expressed as a 
                                percentage and rounded to the nearest 
                                percent) of the number of low-income 
                                units in the building that meet the 
                                applicable design standards for 
                                occupancy by persons with mental, 
                                physical, sensory, or developmental 
                                disabilities bears to the total number 
                                of units in the building, exceeds
                                    ``(II) 5 percentage points.
                    ``(G) Increase in credit for buildings serving 
                extremely low-income families.--
                            ``(i) In general.--In the case of any 
                        building in which 20 percent of the units are 
                        occupied by extremely low-income families and 
                        which is designated by the housing credit 
                        agency as requiring the increase in credit 
                        under this subparagraph in order for such 
                        building to be financially feasible as part of 
                        a qualified low-income housing project--
                                    ``(I) in the case of a new 
                                building, the eligible basis of such 
                                building shall be increased by 50 
                                percent of such basis determined 
                                without regard to this subparagraph and 
                                subparagraphs (B), (C), (D), (E), and 
                                (F), and
                                    ``(II) in the case of an existing 
                                building, the rehabilitation 
                                expenditures taken into account under 
                                subsection (e) shall be increased by 50 
                                percent of such expenditures determined 
                                without regard to this subparagraph and 
                                subparagraphs (B), (C), (D), (E), and 
                                (F).
                            ``(ii) Extremely low-income families.-- For 
                        purposes of this subparagraph, the term 
                        `extremely low-income families' means families 
                        whose annual incomes do not exceed 30 percent 
                        of the area median gross income, as determined 
                        in consultation with the Secretary of Health 
                        and Human Services.
                    ``(H) Limitation.--Notwithstanding subparagraphs 
                (B), (C), (D), (E), (F), and (G)--
                            ``(i) the eligible basis of any building 
                        shall not exceed an amount equal to 250 percent 
                        of such basis determined without regard to 
                        subparagraphs (B), (C), (D), (E), (F), and (G), 
                        and
                            ``(ii) the rehabilitation expenditures 
                        taken into account under subsection (e) shall 
                        not exceed 250 percent of such expenditures 
                        determined without regard to subparagraphs (B), 
                        (C), (D), (E), (F), and (G).''.
            (2) Conforming amendments.--Section 42(d)(5)(B)(i) of such 
        Code is amended--
                    (A) by striking ``shall be 130 percent of'' each 
                place it appears in subclauses (I) and (II) and 
                inserting ``shall be increased by 30 percent of'', and
                    (B) by striking ``this subparagraph'' each place it 
                appears in subclauses (I) and (II) and inserting ``this 
                subparagraph and subparagraphs (B), (C), (D), (E), (F), 
                and (G)''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to buildings placed in service after the date of 
        the enactment of this Act.
    (b) Set-Aside for Certain Projects.--
            (1) In general.--Section 42(h) of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        paragraph:
            ``(9) Portion of state ceiling set-aside for certain 
        projects.--
                    ``(A) In general.--Not more than two-thirds of the 
                State housing credit ceiling for any State for any 
                calendar year shall be allocated to projects other than 
                qualified low-income housing projects described in 
                subparagraphs (C), (D), (E), (F), and (G) of subsection 
                (d)(5).
                    ``(B) State may not override set-aside.--Nothing in 
                subparagraph (F) of paragraph (3) shall be construed to 
                permit a State not to comply with subparagraph (A) of 
                this paragraph.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to calendar years beginning after the date of the 
        enactment of this Act.

SEC. 4. TAX-EXEMPT BOND FINANCING REQUIREMENT.

    (a) In General.--Section 42(h)(4) of the Internal Revenue Code of 
1986 is amended by striking subparagraph (B) and inserting the 
following:
                    ``(B) Special rule where minimum percent of 
                buildings is financed with tax-exempt bonds subject to 
                volume cap.--For purposes of subparagraph (A), 
                paragraph (1) shall not apply to any portion of the 
                credit allowable under subsection (a) with respect to a 
                building if--
                            ``(i) 50 percent or more of the aggregate 
                        basis of such building and the land on which 
                        the building is located is financed by 1 or 
                        more obligations described in subparagraph (A), 
                        or
                            ``(ii)(I) 15 percent or more of the 
                        aggregate basis of such building and the land 
                        on which the building is located is financed by 
                        1 or more qualified obligations, and
                                    ``(II) 1 or more of such qualified 
                                obligations--
                                            ``(aa) are part of an issue 
                                        the issue date of which is 
                                        after December 31, 2023, and
                                            ``(bb) provide the 
                                        financing for not less than 5 
                                        percent of the aggregate basis 
                                        of such building and the land 
                                        on which the building is 
                                        located.
                    ``(C) Qualified obligation.--For purposes of 
                subparagraph (B)(ii), the term `qualified obligation' 
                means an obligation which is described in subparagraph 
                (A) and which is part of an issue the issue date of 
                which is before January 1, 2026.''.
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to buildings placed in service in taxable years beginning 
        after December 31, 2023.
            (2) Rehabilitation expenditures treated as separate new 
        building.--In the case of any building with respect to which 
        any expenditures are treated as a separate new building under 
        section 42(e) of the Internal Revenue Code of 1986, for 
        purposes of paragraph (1), both the existing building and the 
        separate new building shall be treated as having been placed in 
        service on the date such expenditures are treated as placed in 
        service under section 42(e)(4) of such Code.

SEC. 5. MODIFICATION OF EXTENDED USE PERIOD.

    (a) In General.--Section 42(h)(6)(D)(ii)(II) of the Internal 
Revenue Code of 1986 is amended by striking ``15 years'' and inserting 
``35 years''.
    (b) Effective Date.--The amendment made by this section shall apply 
to agreements entered into in taxable years beginning after the date of 
the enactment of this Act.
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